Must Landlord Waive Co-signer Requirement?

REAL ESTATE LAW

A Disabled Tenant-applicant Was Rejected Even Though His Mother Offered To Pay The Rent.

January 25, 2004|By Robert Bruss, Tribune Media Services

The case history: John, a former psychiatric technician who earned $36,000 a year, is disabled by AIDS and is unable to work. He receives $837 a month from Social Security Disability Insurance and up to $400 a month from the Housing Opportunities for People with AIDS organization.

To reduce his apartment rental cost from $1,545 a month, John found a one-bedroom apartment for $875 monthly rent at the Park Branham Apartments. John's credit is excellent, and he paid his rent on time for six years to his former landlord.

But his rental application was rejected by the Park Branham landlord because it is her policy to require monthly income of at least three times the monthly rent. John's mother, Anne, who has lived nearby in her mortgage-free house for 27 years and has monthly income of $3,770.26 from a pension, offered to rent the apartment in her name for John or to co-sign his lease.

But the manager refused the application because of the landlord's policy against co-signers. An AIDS Legal Services attorney then wrote a letter on behalf of John to the property manager, citing the Federal Fair Housing Amendments Act, which makes it unlawful to discriminate against disabled people by refusing to make reasonable accommodations. After receiving the letter, landlord's attorney confirmed John's rental application rejection.

John then sued the landlord under the FHAA and state discrimination laws for refusal to make a reasonable accommodation so he could rent the apartment. The lawsuit alleged disparate impact, intentional discrimination against a disabled person and failure to reasonably accommodate John's disability by the landlord's refusal to waive the no co-signer policy.

The landlord's attorney responded that the FHAA does not require landlords to make economic policy changes to accommodate disabled tenant applicants.

The question: If you were the judge, would you order the landlord to make a reasonable accommodation by accepting John's mother either as the primary tenant for John's apartment or as a co-signer obligated on his lease?

The decision: The judge said yes.

The FHAA (42 U.S.C. 3601) requires rental property owners to reasonably accommodate a disabled tenant's risk of nonpayment of rent, the judge began. John's proposed financial arrangement of renting the apartment to his mother for his occupancy would assure the landlord of receiving the rent each month, the judge continued.

John is not asking for a reduced rent, just a waiver of the landlord's "no co-signer" rule, the judge said.

There is no question John's mother, Anne, has adequate income and excellent credit, the judge said. Therefore, the landlord is ordered to make a reasonable accommodation under the FHAA to accept John's mother either as the primary tenant or as a co-signer with John, the judge ruled. Landlords must comply with the FHAA by making reasonable economic accommodations for disabled tenant applicants, the judge concluded.